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China Trims Quotas for Rare Earth Exports

Ren Limin, a worker at the Jinyuan Company's smelting workshop, prepares to pour the rare earth metal Lanthanum into a mold near the town of Damao in China's Inner Mongolia Autonomous Region Oct. 31, 2010.

China says it will cut its shipments of rare earth minerals by more than 11 percent next year, reducing the world's supply of metals needed for the manufacture of high-tech products ranging from computer drives to hybrid cars.

The Commerce Ministry announced its 2011 quotas Tuesday, setting total exports at less than 14,500 tons compared to more than 16,000 set a year ago. The new quotas, which may be adjusted during the year, come amid growing international concern about availability of the metals, 97 percent of which are produced in China.

Beijing has been gradually reducing its exports of rare earths, citing an increase in domestic demand and environmental concerns. International interest spiked after Japanese manufacturers reported earlier this year that shipments from China were cut off during a diplomatic dispute between the two countries.

The United States said last week that it may complain to the World Trade Organization about China's restraints on exports of the rare earths.

Several countries have been scrambling to begin or resume the mining of rare earths since the shipments to Japan were interrupted.

Japan has explored possibilities for rare earth mining with Mongolia and Australia, while U.S. and Canadian companies say they will begin mining. South Korea this week announced an agreement to acquire rare earths in Burma.

Some information for this report was provided by AP and Reuters.